Horace Mann Educators Corporation has entered into two agreements with Medical Mutual of Ohio to acquire businesses providing employee assistance, supplemental insurance, group life insurance and disability coverage. The transactions have a combined net purchase price of approximately $240 million.
The acquired operations are expected to add nearly $200 million in annual revenue. They serve more than one million covered lives through approximately 7,000 employer relationships and have a distribution network of more than 1,000 agents and brokers.
Under the first agreement, Horace Mann will acquire Employee Services, also known as ESI, by purchasing its membership interests. ESI provides employee assistance services that help workers address personal, behavioral health and workplace-related challenges.
In a separate transaction, Horace Mann will acquire all outstanding shares of Reserve National Insurance Company, adding an individual supplemental insurance platform. Supplemental products can provide benefits for expenses or financial needs that may not be fully covered by primary health insurance.
Horace Mann will also reinsure the group life and disability insurance business of MedMutual Life Insurance Company. Medical Mutual will retain the underlying legal insurance entity.
Through reinsurance, Horace Mann would assume specified financial risks and economic responsibilities associated with the covered policies without directly acquiring the legal entity that issued them. The structure allows Medical Mutual to retain the insurer while transferring the selected business to Horace Mann.
Horace Mann expects the businesses to broaden its employer-focused offerings and expand its reach beyond its established educator customer base. The acquired distribution relationships could also create opportunities to offer a larger portfolio of insurance and financial products.
The transactions are expected to be immediately accretive to Horace Mann’s core earnings per share and shareholder return on equity. The company attributed the expected financial benefits to high-margin insurance operations, recurring fee revenue and greater capital efficiency.
Horace Mann plans to finance the acquisitions using excess capital and borrowings through its existing revolving credit facility. The company said customers and business partners are not expected to experience service disruptions during the transition.
The ESI acquisition is expected to close in the fourth quarter of 2026. The Reserve National acquisition and group life and disability reinsurance transaction are expected to close in the first quarter of 2027.
Each agreement remains subject to customary closing conditions. The Reserve National acquisition and MedMutual Life reinsurance arrangement also require regulatory approvals, and completion is not assured until all applicable conditions are satisfied.
Raymond James is serving as financial adviser to Horace Mann, while Eversheds Sutherland is providing legal counsel. Sherman & Company is advising Medical Mutual financially, and Squire Patton Boggs is serving as its legal counsel.
KEY QUOTES:
“Our strategy has always been centered on creating stronger customer relationships by providing meaningful solutions that meet our customer needs.”
“These businesses build on our long-term strategy by enhancing our employer value proposition, broadening our distribution capabilities and expanding customer relationships. They create more opportunities to serve educators and employers with a broader portfolio of solutions while extending our reach through complementary customer and distribution relationships.”
“These transactions also reflect the disciplined approach we’ve consistently taken to capital allocation. We invest where we see the strongest opportunities to create long-term profitable growth while delivering attractive returns for shareholders. The differentiated capabilities, high-quality earnings, and exceptional people joining Horace Mann make these businesses both a natural strategic fit and an attractive financial investment.”
Marita Zuraitis, President and CEO of Horace Mann
“This decision reflects our ongoing focus to align our portfolio with our long-term strategy. We will continue to focus our investment and leadership attention on our core businesses and deliver the highest value for our customers and the communities we serve.”
“We are pleased to work with Horace Mann on an outcome that advances the objectives of both organizations and supports a smooth transition for customers, partners and team members while ensuring these businesses continue to thrive.”
Tony Helton, President and CEO of Medical Mutual of Ohio
